Text: Neazor Report on GCSB and Kim Dotcom

[The following is a automated text-recognition version of
the report by Inspector-General of Intelligence and Security
Paul Neazor into the GCSB interception the communications of
Kim Dotcom and Bram Van Der Kolk.

As I have been briefed today by the Director of GCSB, and as I understand you have now been made aware, the GCSB has discovered that it acted unlawfully in intercepting the communications of certain individuals connected with the above case, apparently acting in the erroneous belief that they were foreign persons when in fact they held New Zealand residency status.

I would be grateful if you would undertake without delay an inquiry into the circumstances of this matter and provide me with a report which identifies:

The facts of the case;

An assessment ofthe circumstances including any errors by the Bureau and its officers; and

Any measures which you consider necessary in order to prevent a recurrence.

This
report relates to your request on 17 September that I should
enquire into action by the GCSB affecting Kim Dotcom and
others including making an assessment of errors. The Bureau
has reported to you that there appears to have been a breach
of statutory restrictions applicable to the collection work
of the GCSB.

Background:

Kim Dotcom is in dispute with
United States authorities about the accumulation of sums of
money, the gathering of which may have given rise to
allegations of criminal activity in the United States which
the authorities there wish to pursue. That pursuit may well
involve an attempt by Court proceedings to extradite Kim
Dotcom and others to the United States, involving questions
of discovery of documents and arrest of persons, Kim Dotcom
and others.

New Zealand Police involvement in the
event:

A specialist group of New Zealand Police Officers
has been involved in assisting the United States authorities
and investigating a couple of related New Zealand matters.
As part of the New Zealand Police assistance, communications
passed between the Police group and GCSB. Those
communications were related to a proposal to arrest Kim
Dotcom and associated persons. lt was believed by Police
Officers that these persons could present potential danger
to officers and others involved if the attempted arrest was
made. With that belief it was important for the Police to
know what action Dotcom and associated people might plan to
take and where; i.e. they sought intelligence about possible
events. The documents show that information was collected
about Dotcom and his associates by the Bureau (largely about
their movements or possible movements at relevant times) and
passed on to the Police. In my view, considered on its own,
the passing on as such could have been lawful but the
collection in the circumstances was not. The documents I
have seen which record the events do not disclose any
interest or inquiry by GCSB about the facts or events of
Dotcom’s disputed activity; just where he might be and who
might be with him.

Involvement of the GCSB
Mechanism:

Like other countries, New Zealand has
Government agencies whose task is, covertly if necessary, to
collect and report on information which is relevant to
security. information is obtained by various appropriate
techniques which it is unnecessary to set out. The relevant
New Zealand agencies are the New Zealand Security
Intelligence Service and the Government Communications
Security Bureau. Only the latter is involved in this event.
The mandate of each agency is set out in an Act of
Parliament which is designed to control the range of the
agency's enquiry and how it works, Each agency's work is not
at large; it is limited by its controlling Act.

GCSB
Gathering and Retaining Information and Dealing with Crime:
For present purposes GCSB has the specific functions of
gathering foreign intelligence, in accordance with the
foreign intelligence requirements of the Government of New
Zealand:

(i) by intercepting communications under the
authority of the GCSB Act 2003;

(ii) by collecting
information in any other lawful manner.

Another of the
Bureau's functions is to provide advice and assistance to
any public authority in New Zealand on any matter that is
relevant to the functions of the public authority or other
entity and to a purpose specified in the Act e.g. to pursue
the GCSB’s objective of the provision of foreign
intelligence that the Government in New Zealand requires, to
protect the safety of any person, and in support of the
prevention or detection of serious crime. The Bureau has
other specified functions, but these are what is presently
relevant.

The Bureau is specifically empowered to retain
any intercepted communication if its content relates to the
Bureaus’ objective or functions.

lt may for the purpose
of preventing or detecting serious crime in New Zealand or
in any other country, retain information that comes into its
possession and may communicate that information to members
of the New Zealand Police. Hence my view that passing
information to the Police could be lawful.

Foreign
Element:

This is the significant factor in the present
case.

The Bureau is intended to collect foreign
intelligence only. That theme runs through the whole Act.
All of the provisions authorising collection of intelligence
and communications are related to what is “foreign" -
“foreign inte//igence" (s.7 (i) (a) and (b)), (s.8 (i)
(a)) “foreign communications" (s.8) and prohibition
against targeting domestic communications (ss. 13, 14, 16
and 19).

A descriptive process is used in the GCSB Act.
Examples are-

“foreign communications means
communications that contain, or may reasonably be expected
to contain, foreign intelligence".

"foreign intelligence
means information about the capabilities, intentions, or
activities of a foreign organisation or a foreign person
".

”foreign person means an individual who is neither a
New Zealand Citizen nor a permanent
resident...".

"permanent resident means a person who is,
or who is deemed to be, the holder of a residence class visa
under the Immigration Act 2009. "

The first inquiry as to
whether a person is to be regarded as "foreign" under this
Act is related to citizenship or permanent residence. lf the
person concerned does not have one of those statuses, he or
she is foreign for the purpose of the GCSB Act and his or
her communications are not protected. If the person is a
citizen of New Zealand or a permanent resident his or her
communications are protected. People in the permanent
residence category were originally described in the GCSB Act
as the holder of a residence permit but are now described by
a concept called a “residence class visa".

The
Immigration material I have seen in respect of Dotcom shows
that he was granted a residence visa offshore under the
Immigration Act 1987, Investor Plus category, in November
2010. At that point in time he did not meet the deinition of
'permanent residence' under the GCSB Act as it then
was.

However, before he arrived in New Zealand the new
Immigration Act 2009 came into force on 29 November 2010 and
deemed him to hold a residence class visa from that point in
time. He met the definition of ‘permanent resident' for
the purposes of the GCSB Act accordingly.

Although
Dotcom's status is subject to monetary and residential
conditions for a period of three years short of actually
being deported l\/lr Dotcom retains his immigration
residence status and remains a permanent resident for the
purposes of the GCSB Act.

It was on my understanding not
recognised that Dotcom as the holder of a resident visa
under a particular category provided for by the Immigration
Act was therefore a ‘permanent resident’ (and thus a
protected person) under the GCSB Act.

Potential for
confusion:

Dotcom is not on my understanding a New Zealand
citizen - he is Finnish or German. He is however one of a
category of people who is treated in New Zealand as if he
ought to have protection against collection of his
information. This result has come about by reference to and
application of the Immigration Act. That he (and others) has
protection of their communications under the GCSB Act is
simply an effect of what has happened under the Immigration
Act, so long as the relevant words apply to him.

As this
matter went along what was discovered in the case of Dotcom
and associated people was that resident status had been
obtained on their behalf under the Immigration Act 1987 and
carried forward under the later 2009 Act. It was understood
incorrectly by the GCSB that a further step in the
immigration process would have to be taken before Dotcom and
associates had protection against interception of
communications.

Leaving aside possible confusion arising
from the effect of the permit to be in New Zealand Dotcom
and party had, the application made by the Police to GCSB
was a proper one: the request was made on the basis that the
information sought was foreign intelligence contributing to
the function of the New Zealand Police and supporting the
prevention or detection of crime. The GCSB acting on it was
proper.

Enquiry was made during the activity in an attempt
to ensure that the Bureau acted within its legal mandate as
to what it can collect. The illegality arose because of
changes in the Immigration Act wording and some confusion
about which category Dotcom was in thereafter.

Complete
avoidance of a recurrence will only come about if the system
is such that those requesting assistance from the Bureau
about non citizens check with Immigration the immigration
status of people who may become targets to be sure of what
their immigration status in fact is (not may be) in terms of
the GCSB Act definitions and tell the Bureau what they have
ascertained. It is important to realise that what the GCSB
may do is governed finally by the GCSB Act, not the
Immigration Act. Because the law allows the covert
collection of information about only some people in New
Zealand, the events demonstrate that it is important to be
sure at all times of the proposed target's legal status in
the country.

Summary:

- In my view the only issue of
illegality arises in this matter from confusion in this
instance between the case of a person transferring funds and
the general category of residents .

- The GCSB is
controlled by its governing Act in what it may do. That Act
makes it clear that the Bureau is intended to collect
foreign intelligence only, but that includes the function of
assisting the Police by gathering foreign intelligence for
the purpose of preventing or detecting serious crime.

- A
foreign person for the purpose of the GCSB Act is someone
who is neither a New Zealand citizen nor (now) the holder of
a residence class visa under the Immigration Act.

- People
who hold a residence class visa under the Immigration Act
have protection against the collection of information under
the GCSB Act even if they are not classified as a
citizen.

- In this case it was recognised that Dotcom was
not a New Zealand citizen. He was classed as the holder of a
residence class visa in a particular category but it was not
apparent to the Police or GCSB that he thereby fell into a
protected category. Because he should have been regarded as
in such a category, collection was not allowed under the
GCSB Act and in that way illegal.

- Collection had in fact
stopped before it was recognised that he did fall within a
protected category..

- The information sought to be
collected did not relate to the details or merits of his
dispute in the US. It was about where he was or might be
expected to be in New Zealand at a particular
time.

Recommendation to prevent recurrence:

16. Since
occasions for the Police to seek assistance from GCSB in
matters of safety or security will assuredly arise again
under the GCSB Act as it stands, what is needed is assurance
available to GCSB that the subject of the information sought
is not protected by the terms of the GCSB Act, i.e.

that
the person concerned is not a New Zealand citizen, that he
or she is not a permanent resident and is not the holder of
a residence class visa under the Immigration Act. There will
need to be alertness that:

(i) the wording of the
provisions of the GCSB Act are controlling;

(ii) since the
relevant wording of either Act may change it would be useful
for the applicant for assistance to advise what factors as
to status they rely on, and what words in the GCSB Act they
rely on for their application.

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